Savannah Energy PLC, the British independent energy company with focus projects delivery has announced its unaudited half-year results for the six months ended 30 June 2024.
The H1 2024 Unaudited Results Savannah said, showed a strong financial performance, with the company’s total income increasing by 40% to US$233.4 million, compared to US$167.6 million in H1 2023. This comprises total revenues of US$123.5 million and other operating income of US$109.9 million.
Its operating profit also stood at US$152.3 million, 130% higher than H1 2023 (US$66.2 million), with adjusted EBITDA of US$91.6 million, compared to US$108.2 million in H1 2023. This excludes other operating income which when included shows a 47% increase year-on-year to US$201.5 million, compared to US$137.1 million in H1 2023.
Its statement to Energy Window International by email shows the company’s operating expenses plus administrative expenses coming up to US$75 million, and capital expenditure of up to US$50 million.
In terms of operations, its average gross daily production in Nigeria for the period stood at 24.4 Kboepd, representing an increase of 3% compared to FY 2023 (23.6 Kboepd).
Its renewable energy projects in motion at period-end rose to 696 MW. With so much belief in Africa’s potentials, Savannah says it aims to become one of the largest renewable energy development companies in Africa over the next two years – delivering rapidly growing pipeline of solar, wind, and hydro power projects while targeting a portfolio of up to 1 GW+ of renewable energy projects in motion by end 2024 and up to 2 GW+ by end 2026.
Andrew Knott, CEO of Savannah Energy, said: “I am pleased to report our results for the first six months of 2024, as well as the wider progress we are making developing our business. Key highlights in H1 included the delivery of US$233m of Total Income1 and the announcement of our planned acquisition of SINOPEC’s upstream assets in Nigeria. Alongside this, we are pleased to report strong progress in the development of our renewable energy business, particularly relating to our planned projects in Niger and Cameroon. Looking forward we expect to make a series of announcements around our entry into further renewable energy projects prior to year-end. We remain unequivocally an “AND” company, seeking to deliver strong performance both for the short AND long term across multiple fronts, and pursuing growth opportunities in both the hydrocarbon AND renewable energy sectors.”
The table below provides an overview of our results for H1 2024 with a comparison for H1 2023:
Financial highlights
| Six months ended
30 June 2024 |
Six months ended
30 June 2023* |
|
| Total Income, US$ million | 233.4 | 167.6 |
| Adjusted EBITDA, US$ million | 91.6 | 108.2 |
| Adjusted EBITDA including Other operating income, US$ million | 201.5 | 137.1 |
| Revenue, US$ million | 114.8 | 123.7 |
| Operating profit, US$ million | 152.3 | 66.2 |
| Operating margin, % (Operating profit/ Total Income1) | 65.3% | 39.5% |
| Operating expenses plus administrative expenses, US$ million | 27.5 | 25.1 |
| Operating expenses plus administrative expenses, US$/Mscfe | 1.1 | 1.1 |
The prior year comparative has been restated to conform with the presentation of “other operating income” in the 2023 annual report
In Nigeria in 2024 YTD, Savannah’s subsidiary, Accugas Limited agreed and extended three gas contracts for a total of up to 105 MMscfpd. This includes the extension of the agreement with First Independent Power Limited (“FIPL”) in January 2024 for an additional 12-month period, whereby Accugas is supplying FIPL’s FIPL Afam, Eleme and Trans Amadi power stations with up to 65 MMscfpd of gas; a new 24-month agreement signed in July 2024 with Ibom Power Company Limited, owner of the Ibom power station, to supply up to 30 MMscfpd of gas, following the expiration of the previous 10-year agreement; extension of the agreement with Central Horizon Gas Company Limited (“CHGC”) was signed in August 2024 for an additional 12-month period, whereby Accugas is supplying CHGC with up to 10 MMscfpd of gas.
The company also said it is continuing to make progress on the US$45 million compression project at the Uquo Central Processing Facility (“CPF”), adding that the project has remained on budget and on track, to be completed this 2024. The company also said it is currently working on a proposed further development programme for the Uquo field which is expected to see additional wells drilled in 2025 and 2026.
On SIPEC Acquisition, in March 2024, the company announced the proposed acquisition (via two separate transactions) of 100% of SIPEC for a total consideration of US$61.5 million. SIPEC’s principal asset is the 49% non-operated interest in Stubb Creek. A subsidiary of Savannah, Universal Energy Resources Limited, is the 51% owner and operator, expecting completion of transaction in Q4 2024. Transaction consideration is expected to be funded through what it called “a new senior debt facility” arranged by Standard Bank of South Africa Limited and the existing cash resources of the Company.
As at year end 2023, SIPEC had an estimated 8.1 MMstb of 2P oil reserves and 227 Bscf of 2C Contingent gas resources. The Company’s Reserve and Resource base is expected to increase by approximately 46 MMboe following completion of the SIPEC Acquisition. SIPEC oil production is estimated at an average of 1.4 Kbopd for 2024. Following completion of the SIPEC Acquisition, Savannah plans to implement a de-bottlenecking programme at the Stubb Creek processing facilities. It is anticipated that within 12 months of completion of the acquisition, this will lead to Stubb Creek gross production increasing by 135% to approximately 4.7 Kbopd. Noting that SIPEC Acquisition is meant to significantly serve as an additional feedstock gas available for sale to its Accugas subsidiary, which also underpins Savannah’s long-term ambition to be the gas supplier of choice in Nigeria.
In the Niger, Savannah says it remains committed to the 35 MMstb (Gross 2C Resources) R3 East oil development in South-East Niger. The Niger-Benin oil export pipeline, now fully operational, provides a clear route to international markets for crude oil produced from our R1234 contract area. The company maintains that it has continued to progress its planned four well testing programme and are in the process of mobilising the required long lead item equipment into country.
Located in the Tahoua Region of southern Niger, Savannah’s Parc Eolien de la Tarka wind farm project is anticipated to be the country’s first wind farm and the largest in West Africa, with a total power generation capacity of up to 250 MW. The company meanwhile has signed agreements with two leading international Development Finance Institutions (the International Finance Corporation, the private sector arm of the World Bank, and the US International Development Finance Corporation – the U.S government development finance institution), to fund approximately two-thirds of the pre-construction development costs of the project.
Adding that the project made significant progress in H1 2024 with all key studies now either complete or at an advanced stage. It said it submitted its Environmental and Social Impact Assessment (“ESIA”) scoping report to the Government of Niger and has continued to progress the ongoing ESIA field work additional studies required for the submission of the full ESIA report, expected in 2025. As part of the ESIA studies, Savannah says it’s currently performing a land survey of the wind farm area, in partnership though with the Department of Geography of the Abdou Moumouni University of Niamey, where it said it enabled a cartography and software training programme for a cohort of its students, before deploying them under supervision on the Tarka site. This it said also provided local students with a material and exciting learning experience, while involving them in a transformational energy project for their country.
In August 2024 according to the company, it hosted a site visit for Niger’s Minister of Energy where it said it provided the Minister, Governor of Tahoua, local officials and community representatives with a presentation on the project and a tour of the wind farm site, detailing its plans for the project and outlining its transformative potential for Niger and its people. This is while reporting the Minister as stating that the Parc Eolien de la Tarka wind farm project was one among top priority considerations on the list of the country’s Energy Ministry.
Parc Eolien de la Tarka is expected to produce up to 800 GWh of electricity per year, representing approximately 22% of Niger’s annual electricity demand, based on the country’s projected energy demand in 2026. The construction phase is expected to create over 500 jobs, while the project has the potential to reduce the cost of electricity for Nigeriens and avoid an estimated 450,000 tonnes of CO2 emissions annually, the company said.
The company also said it has continued to progress the two photovoltaic solar power plants, expected to be located within 20 km of the cities of Maradi and Zinder. It said that in H1 2024, it presented the preliminary commercial and technical proposals to the Government of Niger, with sanctioning decision on the projects expected in 2025, with first power in 2027.
In Cameroon, Savannah says it has made substantial progress on the Bini a Warak Hybrid Hydroelectric and Solar Project, following the approval of the optimisation and proposed redesign of the project given by the Minister of Water and Energy. The redesigned project it said involves the construction of a hydroelectric dam on the Bini River in the northern Adamawa region of Cameroon, will incorporate photovoltaic solar, while raising its installed power generation capacity from up to 75 MW to up to 95 MW. Adding that the project is on course in order to hit the anticipated sanction in 2026, with first power targeted in the 2028 to 2029 window.
In South Sudan, Savannah says it is advancing its discussions regarding a potential transaction in South Sudan, as further update on this is expected to be made in early November.
On Chadian Arbitration Update, even as previously disclosed in its 2023 Annual Report, according to the company, with reference to “Savannah-Chad Inc (“SCI”)”, the company mentions commencement of arbitrage proceedings against the Government of the Republic of Chad and its instrumentalities, in response to the March 2023 “nationalisation of SCI’s rights” in the Doba fields in Chad, and other breaches of SCI’s rights. Also mentioning that its other wholly owned subsidiary, “Savannah Midstream Investment Limited (“SMIL”), had equally entered into an arbitrage proceedings in relation to the nationalisation of its investment in Tchad Oil Transportation Company, mentioned as a Chadian company which owns and operates the section of the Chad-Cameroon pipeline located in Chad. It further said that SMIL also commenced arbitrage and other legal proceedings for breaches of SMIL’s rights in relation to Cameroon Oil Transportation Company (“COTCo”), the Cameroon company which owns and operates the section of the Chad-Cameroon pipeline located in Cameroon – saying that it expects all the arbitrage proceedings to be concluded in the second half of 2025. SCI and SMIL are claiming in excess of US$840 million for the nationalisation of their rights and assets in Chad, and SMIL has a claim valued at approximately US$380 million for breaches of its rights in relation to COTCo. Whilst the Government of the Republic of Chad has acknowledged SCI’s and SMIL’s right to compensation, no compensation has been paid or announced by the Government of the Republic of Chad to date.
Adding that it remains ready and willing to discuss with the Government of the Republic of Chad an amicable solution to the disputes, maintaining however “to vigorously pursue its rights in the arbitrations.”